The board of Arkan Building Materials Company has approved the offer, received from General Holding Corporation (Senaat) on 9 May, to transfer its wholly-owned subsidiary, Emirates Steel Industries (Emirates Steel), to Arkan.

Arkan will acquire Emirates Steel in exchange for the issuance of a convertible instrument to Senaat, according to a press release on Thursday.

Upon closing of the transaction, the instrument would automatically convert into 5.1 billion ordinary shares in Arkan at a fixed price of AED 0.798 per share.

Following the conversion, Senaat would own 87.5% of the entire issued share capital of Arkan. 

The Chairman of Arkan, Jamal Salem Al Dhaheri, said: “It [the transaction] will strengthen Arkan’s balance sheet and financial performance, deliver greater international scale, and position Arkan to become an entry point for investing in a key regional sector while playing a key role in the UAE’s Industrial Strategy ‘Operation 300 Billon.’”